EX-99.1 3 e16871ex99_1.txt PRESS RELEASE Exhibit 99.1 EGL, INC. Reports 36% Improvement in EPS; Gross Revenues Increase 18% to Record Levels HOUSTON, Feb. 10 /PRNewswire-FirstCall/ -- EGL, Inc. (Nasdaq: EAGL) announced that net income increased 37% to $9.1 million for the three months ended December 31, 2003, compared to $6.7 million in the fourth quarter of 2002. Diluted earnings per share for the quarter were $0.19 compared to $0.14 in Q4 2002. Q4 Financial Highlights -- Gross revenues increased 18% as compared to the same quarter last year on strong international air, ocean, customs and logistics activity -- Ocean net revenues increased 29% as compared to the same quarter last year -- 8.4% operating margin reflects the highest operating margin since Q3 2000 -- Net income increased 37% compared to Q4 2002 and was at the highest level since Q3 2000 Three Months Ended Year Ended $ thousands (except EPS) 12/31/03 12/31/02 12/31/03 12/31/02 Gross revenues $621,944 $ 527,880 $2,171,732 $ 1,869,333 % change + 17.8% + 16.2% Net revenues $198,392 $ 183,537 $ 735,252 $ 672,132 % change + 8.1% + 9.4% Net revenue margin 31.9% 34.8% 33.9% 36.0% Operating income $ 16,583 $ 11,654 $ 44,765 $ 29,672 Net income $ 9,127 $ 6,666 $ 23,945 $ 9,434 Diluted EPS $ 0.19 $ 0.14 $ 0.50 $ 0.20 EGL Chief Executive Officer Jim Crane commented, "We continue to see growth in all international product lines and slight improvements in the USA domestic forwarding market. Our organization continues to focus on growing our business with existing customers, improving yields, increasing utilization of our operating facilities and the deployment of our global operating and financial systems. Our fourth quarter performance reflects steady improvements in the global economy. As the economy continues to recover, our low cost domestic network is positioned to benefit from customers expediting product from overseas suppliers directly to US distribution and retail centers." Gross revenues increased 18% from the fourth quarter of 2002 to $622 million reflecting a 9% increase in airfreight revenues - mainly international, a 50% increase in ocean revenues and a 34% increase in customs brokerage and logistics. North America ground volumes continued to reflect the shift from priority to deferred shipments as the priority volumes declined 9%. Gross revenues outside North America increased 28%. Net revenues of $198 million in the fourth quarter of 2003 increased 8% from last year and were a record high for the Company. Net revenue margins of 31.9% declined by 290 basis points from the fourth quarter of 2002 reflecting increased airline and ocean rates, primarily out of Asia, as well as the continued shift away from the priority product to deferred shipments. Operating income for the quarter increased 42% or $4.9 million, to $16.6 million, as compared to the fourth quarter of 2002 due to the $14.9 million improvement in net revenues and no growth in other selling, general and administrative expenses reflecting leverage on the infrastructure in North America. Operating income as a percent of net revenue improved to 8.4%, the highest levels since 2000. Total Year 2003 Results Gross revenues of $2.17 billion for the twelve months ended December 31, 2003 increased 16% over 2002. Net revenues of $735 million increased 9% while net income of $23.9 million improved by 154% from 2002. Fully diluted earnings per share for 2003 improved 150% to $0.50 compared to $0.20 for 2002. Cash flow from operations for 2003 was $35 million, compared to net income of $24 million. Capital investments during 2003 were $27 million, down from $41 million in 2002. First Quarter of 2004 and Total Year 2004 Outlook EGL expects first quarter 2004 diluted earnings per share in the range of $0.05 to $0.07, compared to $0.06 for the first quarter of 2003. For 2004, EGL projects gross revenue in the range of $2.3 to $2.4 billion and diluted earnings per share in the range of $0.75 - $0.85. Capital expenditures for 2004 are estimated at $35 million. Earnings Conference Call EGL, Inc. plans to host a conference call for shareholders and the investing community on February 10, 2004 at 11 a.m. Eastern time (8 a.m. Pacific) to review results for the quarter and year ended December 31, 2003. The call can be accessed by dialing (719) 457-2657, access code 336825 and is expected to last approximately 60 minutes. Callers are requested to dial in at least 5 minutes before the start of the call. The call will also be available through live webcast on the company's website, www.eaglegl.com, on the Investor Relations page. An audio replay will be available until Tuesday, February 24, 2004 at (719) 457-0820, access code 336825. Fourth quarter and total year 2003 product and geographic data and air freight statistics are available on EGL's website, www.eaglegl.com on the Investor Relations page. Houston-based EGL, Inc. operates under the name EGL Eagle Global Logistics. EGL is a leading global transportation, supply chain management and information services company dedicated to providing superior flexibility and fewer shipping restrictions on a price competitive basis. With 2003 revenues exceeding $2.1 billion, EGL's services include air and ocean freight forwarding, customs brokerage, local pickup and delivery service, materials management, warehousing, trade facilitation and procurement, and integrated logistics and supply chain management services. The Company's shares are traded on the NASDAQ National Market under the symbol "EAGL". CAUTIONARY STATEMENTS The statements in this press release (and statements in the conference call referred to above) regarding projected profitability, adding to growth, improvement on yields, increased efficiencies, deployment of operating and financial systems, and initiatives in Asia, Europe and the Middle East, first quarter and total year results and diluted earnings per share, projected results for 2004, our ability to outperform the economy and other statements which are not historical facts, are forward looking statements. Such statements involve risks and uncertainties including, but not limited to, general economic conditions, risks associated with operating in international markets, the results of litigation, the timing and effects of any improvements in the regions and industry sectors in which the Company's customers operate, construction of new facilities and other infrastructure improvements, ability to manage and continue growth, competition and other factors detailed in the Company's 2002 Form 10-K, proxy statement/prospectus and other filings with the Securities and Exchange Commission. Should one or more of these risks or uncertainties materialize (or the consequences of such a development worsen), or should underlying assumptions prove incorrect, actual outcomes may vary materially from those forecasted or expected. The Company disclaims any intention or obligation to update publicly or revise such statements, whether as a result of new information, future events or otherwise. The financial information included in this press release is subject to audit and is not complete until filing of the Company's 2003 Form 10-K. EGL, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) (in thousands, except per share amounts) Three Months Ended Twelve Months Ended December 31, December 31, 2003 2002 2003 2002 Revenues $621,944 $527,880 $2,171,732 $1,869,333 Cost of transportation 423,552 344,343 1,436,480 1,197,201 Net revenues 198,392 183,537 735,252 672,132 Operating expenses: Personnel costs 110,529 100,434 416,565 370,817 Other selling, general and administrative expenses 71,280 71,449 273,922 271,643 Operating income 16,583 11,654 44,765 29,672 Nonoperating expense, net (1,901) (727) (6,249) (14,556) Income before provision for income taxes 14,682 10,927 38,516 15,116 Provision for income taxes 5,555 4,261 14,571 5,895 Income before cumulative effect of change in accounting for negative goodwill 9,127 6,666 23,945 9,221 Cumulative effect of change in accounting for negative goodwill - - - 213 Net income $9,127 $6,666 $23,945 $9,434 Basic earnings per share $0.19 $0.14 $0.51 $0.20 Diluted earnings per share $0.19 $0.14 $0.50 $0.20 Basic weighted-average common shares outstanding 47,388 47,034 47,204 47,610 Diluted weighted-averge common shares outstanding 53,431 52,989 47,481 47,811 EGL, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (in thousands) Twelve Months Ended December 31, Cash flows from operating activities: 2003 2002 Net income $ 23,945 $ 9,434 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 31,190 30,527 Bad debt expense 7,162 7,669 Transfer to restricted cash (5,654) (2,393) Other 4,747 10,686 Net effect of changes in working capital, net of assets acquired (26,591) 8,702 Net cash provided by operating activities 34,799 64,625 Cash flows from investing activities: Capital expenditures (27,370) (41,429) Investment in assets held for sale - (11,570) Purchase of short-term investment (540) - Proceeds from sales of other assets 3,006 7,974 Proceeds from sale-lease back transactions 1,158 21,487 Cash received from a minority interest partner - 301 Dividend paid to a minority interest partner (214) - Acquisitions of businesses, net of cash acquired (21,076) (1,081) Initial investment in an unconsolidated affiliate (750) - Cash received from disposal of affiliate - 385 Net cash used in investing activities (45,786) (23,933) Cash flows from financing activities: Repayment of notes payable, net (3,953) (1,407) Repurchase of common stock - (10,014) Issuance of common stock 4,642 1,720 Net cash provided by (used in) financing activities 689 (9,701) Effect of exchange rate changes on cash 37 3,046 Increase (decrease) in cash and cash equivalents (10,261) 34,037 Cash and cash equivalents, beginning of the period 111,477 77,440 Cash and cash equivalents, end of the period $101,216 $111,477 EGL, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (in thousands) December 31, December 31, 2003 2002 ASSETS Current assets: Cash, cash equivalents, restricted cash and short-term investments $115,326 $119,295 Trade accounts receivable, net of allowance 447,353 371,024 Other current assets 59,923 53,412 Total current assets 622,602 543,731 Property and equipment, net 162,666 158,214 Investments in unconsolidated affiliates 38,957 40,042 Goodwill, net 96,209 81,881 Other assets, net 28,609 19,058 Total assets $949,043 $842,926 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current portion of long-term notes payable $8,328 $5,639 Trade payables and accrued transportation costs 271,254 224,132 Accrued expenses and other liabilities 114,974 113,260 Total current liabilities 394,556 343,031 Long-term notes payable 111,130 103,993 Other noncurrent liabilities 18,599 10,509 Minority interest 6,800 8,852 Stockholders' equity 417,958 376,541 Total liabilities and stockholders' equity $949,043 $842,926 Fourth quarter 2003 product and geographic data and air freight statistics are available on EGL's website, www.eaglegl.com on the Investor Relations page. SOURCE EGL, Inc. -0- 02/10/2004 /CONTACT: Elijio Serrano, Chief Financial Officer, +1-281-618-3665, or Mike Slaughter, VP Finance, +1-281-618-3428, both of EGL, Inc./ /Web site: http://www.eaglegl.com / (EAGL) CO: EGL, Inc. ST: Texas IN: TRN AIR SU: CCA ERN